Save the next deposit or equity release?

Discussion in 'Investment Strategy' started by Paterson00, 6th Oct, 2016.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Think it through.

    If you have $100,000 cash in your PPOR offset and you use this to invest, if you are paying 5% pa then you will pay $5,000 more in interest per year. This interest won't be deducitble.

    However if you pay down the PPOR loan by $100,000 and reborrow $100,000 the interest will now be deductible and you will have $5,000 per year in extra tax deductions.

    If you were on the top marginal tax rate that would save you $2,500 per year for the next 5 plus year.
     
    Terry_w, 22nd Jan, 2017
    #21
    Harry30, Perthguy and Corkey like this.
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